Shares decline after Trump-Kim summit halts without a deal
Currencies decline and shares skid in Europe and Asia. New York also looked set for a downbeat start
BANGKOK – Shares fell Thursday in Europe and Asia, with South Korea’s benchmark sinking 1.8 per cent, after talks between U.S. President Donald Trump and North Korean leader Kim Jong Un ended abruptly without an agreement.
The two leaders left the hotel where they met Thursday much earlier than expected and a lunch and joint agreement signing ceremony were cancelled.
By cutting short their meeting, the two leaders foiled hopes for an agreement with tangible progress toward ending the North’s nuclear program that could have raised confidence across the region, especially in South Korea.
In Europe, Britain’s FTSE 100 lost 0.7 per cent to 7,055 while the DAX in Germany fell 0.2 per cent to 11,468. The CAC 40 in France lost 0.1 per cent to 5,219. Shares in New York looked set for a downbeat start, with futures for the Dow Jones Industrial Average and the S&P 500 both down 0.2 per cent.
Trump described his meetings with Kim as “very productive” but said he had to walk away from signing a deal that would involve lifting sanctions imposed against North Korea for its nuclear program.
Meanwhile, U.S. Trade Representative Robert Lighthizer raised doubts about progress in U.S.-China trade talks. He told U.S. lawmakers that “much still needs to be done” before the sides can reach an agreement over Beijing’s technology strategy and other issues.
The two sides have imposed tariffs on billions of dollars’ worth of each other’s products. To allow time for more talks, Trump postponed increasing tariffs on $200 billion in Chinese goods that would have been effective March 2. He has not given a new date for the higher tariffs if negotiations falter.
China has offered to make major purchases of U.S. goods, such as soybeans and natural gas, in a bid to resolve the conflict, but Lighthizer said such steps wouldn’t be enough.
“The issues on the table are too serious to be resolved with promises of additional purchases,” he said. “We need new rules.”
There was more discouraging economic news from China, where a survey released Thursday showed manufacturing activity fell to a three-year low in February amid the tariff battle with Washington.
The monthly purchasing managers’ index by the government statistics bureau and an industry group fell 0.3 points to 49.2 on a 100-point scale on which numbers below 50 indicate activity contracting. That was the lowest level since February 2016.
ASIA’S DAY: Japan’s Nikkei 225 index skidded 0.8 per cent to 21,385.16 while the Shanghai Composite fell 0.4 per cent to 2,940.95. Hong Kong’s Hang Seng declined 0.4 per cent to 28,633.18, while Australia’s S&P ASX/200 added 0.3 per cent to 6,169.00. India’s Sensex added 0.3 per cent to 36,000.08.
ENERGY: U.S. crude lost 36 cents to $56.58 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, slipped 61 cents to $65.78 per barrel.
CURRENCIES: The dollar declined to 110.75 yen from 110.99 yen on Wednesday. The euro strengthened to $1.1415 from $1.1367.